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Welfare and Redistribution in Residential Electricity Markets with Solar Power

Fabian Feger, Nicola Pavanini and Doina Radulescu

No 12517, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: An increasing number of households installing solar panels raises two challenges for regulators: network financing and vertical equity. We propose an optimal tariff design for policymakers to incentivise solar panel adoptions, while guaranteeing the sustainability and equitable distribution of network costs. We estimate structural models of energy demand and solar panel adoption, using a unique matched dataset on energy consumption, income, wealth, solar panel installations, and building characteristics for 135,000 households in the Canton of Bern (Switzerland) in 2008-2013. Our counterfactuals recommend the optimal solar panel installation cost subsidies and optimal tariffs to achieve various solar energy targets.

JEL-codes: D12 D31 L94 L98 Q42 Q52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-reg
Date: 2017-12
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